Here is a link to the State of Wisconsin’s guidance on the issue. Most owners I’ve met that call their workers contractors fail on four or more of the test outlined in the guide. Failing only one of the nine tests will cost you substantially. This is why we use employees exclusively, except for licensed trades like electricians.

Under section 102.07(8)1 of the Wisconsin Statutes, a person is required to meet a nine-part test before he or she is considered an independent contractor rather than an employee. A person is not an independent contractor for worker’s compensation purposes just because the person says they are, or because the contractor over them says so, or because they both say so, or even if other regulators (including the federal government and other state agencies) say so. The nine-part statutory test set forth under s. 102.07(8) of the Act, must be met before a person working under another person is considered not to be an employee. To be considered an independent contractor and not an employee, an individual must meet and maintain all nine of the following requirements:

1. Maintain a separate business.

2. Obtain a Federal Employer Identification number from the Federal Internal Revenue Service (IRS) or have filed business or self-employment income tax returns with the IRS based on the work or service in the previous year. (See note below.)

3. Operate under specific contracts.

4. Be responsible for operating expenses under the contracts.

5. Be responsible for satisfactory performance of the work under the contracts.

6. Be paid per contract, per job, by commission or by competitive bid.

7. Be subject to profit or loss in performing the work under the contracts.

8. Have recurring business liabilities and obligations.

9. Be in a position to succeed or fail if business expense exceeds income.

Note: When requesting a Federal Employer Identification Number (FEIN) from the IRS, you must inform the IRS that you are required by Wisconsin Worker’s Compensation law to obtain a FEIN. A social security number cannot be substituted for a FEIN and does not meet the legal burden of s. 102.07(8).

Disclaimer

I am "just a landlord," NOT an attorney or accountant. If you need legal advice, tax advice or have appendicitis, don’t rely on something you read on the internet and do it yourself. Rather, hire a competent professional.